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The Finnish government has introduced a bill to Parliament that would terminate the current gambling monopoly in online betting and digital casino games in Finland, the Gambling Act would replace the current monopoly with a licensing model, set to commence in January 2027. Below is an interesting article from my DLA Piper’s Finnish gambling law colleagues Tetti Kunnas and Roosa Pitkänen on the potential new gambling licensing model in Finland.
Background
For years Veikkaus, the Finnish government-owned betting agency, has held a monopoly in the Finnish gambling markets. Despite the official monopoly status, Veikkaus has faced increasing competition from foreign operators on the online gambling markets resulting from a legal gap that does not address these operators.
Finnish Competition and Consumer Authority has estimated in 2021 that approximately EUR 520–590 million was spent on gambling outside the monopoly system and about 50% of the money was spent on online gambling. Finland is an attractive market for gambling companies. A major draw is Finland’s highly developed digital infrastructure: it is easy to address issues like player identification and monitor risky gambling behavior. Especially those gambling companies that are operating in other Nordic countries are interested in the Finnish markets as well.
The reform aims to prevent and mitigate gambling-related harm by directing gambling activities towards a regulated and controlled supply of games, provided by responsible operators. While Veikkaus could maintain its monopoly status for lotteries, pools, physical slot machine and casino games, the competitive market could obtain licenses for betting (e.g. virtual and on-track horse betting) and certain types of online gambling games (online casino games, online money bingo and online slot machines). There would be two types of licenses available: gambling game licenses and gambling software licenses.
New Gambling Licensing System in Finland in a Nutshell
According to the proposal, measures to control the availability of gambling games would include e.g. marketing restrictions, age limits, mandatory identity verification, and limitations on game consumption.
Marketing of gambling games would be permitted, but with heaps of restrictions. Generally, all marketing should be moderate in volume, scope, visibility and rate of repetition, and it shouldn’t be targeted to minors or otherwise vulnerable persons. Marketing should also indicate the permitted age limit for gambling and provide information on where to learn more about tools and services available for problem gamblers. License holders could market their games also on their social media accounts in a non-interactive manner, but influencer marketing would be prohibited. The Act would also lay down a set of rules for sponsorship and outdoor marketing.
The Act would retain the age limit for gambling at 18 years or older, and all gambling would be subject to mandatory identity authentication requirement.
In general, the Act also provides for several other implications for license holders. This includes e.g. assessment of the fitness and propriety at the application stage, technical and other surveillance of live gambling games and gambling behavior, gambling system audits, along with the license holder’s self-supervision plans and obligations to notify and report. License holders would also be required to ensure certain type of transparency by enabling gamblers to review their funds and transactions, helping them to assess their gambling behavior. In certain cases license holders are also required to e.g. impose quantity and time restrictions for games and players.
The sanctions for violating the Act could mean administrative and a penalty payment. Granted licenses could also be withdrawn as a last resort. Certain acts would also be punishable under the Finnish Criminal Code. Authority’s toolbox to address illegal gambling activities would include an injunction issuance on the live gambling games or marketing and enforce the injunction with a conditional fine. Authority could also order the internet service provider to remove content violating the law.
Who Can Obtain a Finnish Gambling License and How
All natural and legal persons referred to in the Finnish Enterprise Act and non-profit organisations can apply for a license. To obtain a license, they also need to meet the Gambling Act’s fitness and propriety criteria in addition to general requirements.
Application fees would be laid down by ministry decree. Under the Act on Criteria for Charges Payable to the State, the fee must match the average costs incurred in providing the service. The Act also introduces an annual supervision fee.
The gambling license and game software licenses would be granted for not more than 5 years at a time.
Going Forward
The goal for Parliament is to review the proposal during the spring 2025. If the Parliament accepts the proposed changes, gambling companies could start submitting applications for gambling licenses at the beginning of 2026, with licensed gambling starting at the beginning of 2027. Game software license applications could be submitted from the early 2027 onwards. Following a transition period, the requirement to use only licensed game software for running gambling games will take effect at the beginning of 2028.
Although the new Act is welcomed by the markets, we are facing a new era of open online gambling in Finland. This transition brings several unanswered questions, creating a sense of uncertainty for gambling companies as they strive to comply with the new regulatory framework. As gambling companies need to meet the fitness and propriety criteria set by the Act before they can obtain a license, they should start their compliance preparations already now.
If you need legal support or advice on any issues related to the online gambling reform in Finland, I will be glad to introduce you to my Finnish gambling law colleagues Tetti Kunnas and Roosa Pitkänen, Also, you can have an outline on the Finnish gambling law regime in DLA Piper’s Gambling Laws of the World Guide available HERE and access further gambling law news HERE.